Q & A
Why does my statement show a different benefit amount for disability and regular Social Security?
Complete Question: I just turned 45, so I thought it would be a good idea to take a look at my statement of estimated benefits. As expected, it showed my different estimated benefit amounts for early retirement (62), full retirement age, and delayed retirement (70). However, what I was really confused about was why the estimated benefit amount for disability was larger than the estimated amount for full retirement age. Is this a mistake?
Answer: No, that is actually not a mistake. You may or may not know that Social Security is based on your highest 35 years of earnings. The statement you are looking at has to make estimates of your earnings for the next 17 years. However, there is a subtle nuance to the phrasing of the disability payment amount – it says if you were disabled “today” your payment would be…That is because they are literally telling you how much you would get if you were to be disabled today; therefore, no estimates of future earnings would be needed. For example, let’s say you only actually have 30 years of qualified earnings. If you were full retirement age today, they would average in 5 years of $0 in your benefit amount. But if you became disabled today, they do not expect you to have as many years of earnings as someone in their 60s, so they use a different calculation for determining your disability benefit amount.